Velocity of Money

Velocity of Money

Source: Rich Dad's, Robert Kiyosaki

Professional investor's who want to accelerate retirns understand the benefits of using other peoples money (OPM). The common source is the banks' or other investors' money and both want to accelerate the velocity of their money. They do not leave the money parked on the table.

The professional investor follows the following formula:

1. Invest money into an assett.
2. Get the original investment money back.
3. But keep control of the original asset.
4. Move money into a new asset.
5. Get investment money back.
6. Repeat the process.

This process is called the velocity of money. Financial institutions understand how important it is to expand their money supply in order to increase their earning power. Most investors do not realize they too can expand their own money supply and thereby expand their earning power. Financial institutions do this by making their money move. The more times a dollar moves, the greater the money supply and the greater their earning power of that dollar.

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